AmTrust Bank of Cleveland is under fire from federal regulators for not having enough money in reserves, and it has been ordered to not make any new loans for land acquisition, development or speculative residential construction.

The bank, which was founded in 1889, also has been ordered by the Office of Thrift Supervision to develop an acceptable business plan by Sunday. The order, obtained late Monday, said AmTrust "has engaged in unsafe and unsound banking practices," based on an exam in August.

AmTrust, known here as Ohio Savings until changing its name in 2007, is one of the 15 largest mortgage lenders nationwide, with $30 billion a year in loans, and is among the largest commercial/construction lenders nationwide. It has more than $18 billion in assets.

This region's fifth-largest bank, AmTrust in June reported a healthy 11.5 percent Tier-1 ratio, which is a key measure of financial strength. The cease-and-desist order from OTS, however, said the bank must, by Dec. 31, have a Tier-1 ratio of 7 percent. Obviously, its Tier-1 ratio dropped significantly since June.

Of more concern recently at AmTrust was the percentage of loans that weren't being paid. That figure has been running at 7 percent as of this summer, which was two to three times the average for banks.

The OTS order also requires more stringest quarterly reviews of AmTrust's finances in the future by regulators.

Separate from the OTS order, AmTrust currently has a one star out of five rating from Bankrate, which grades banks based on their capitalization, asset quality, profits and liquidity.

Last month, AmTrust spokeswoman Donna Winfield said the bank was "exploring a range of options" regarding getting money through the U.S. Treasury's rescue program, but she said she was "not in a position to comment on specifics at this time."

The privately owned bank, which doesn't have to disclose as much financial information as a publicly traded bank, this spring cut its work force by 5 percent, eliminating 135 jobs. It employs about 2,700 people, two-thirds of them in Ohio.

Besides its 36 branches in the Cleveland, Akron and Columbus markets, AmTrust has about 33 offices in Florida and Arizona.

To read the OTS order: http://files.ots.treas.gov/enforcement/97037.pdf

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